Enterprise Development & Digitalization of Microfinance Services:
In recent years, as numbers of MFIs has sprouted in Nepal and have been struggling to find client with adequate skills to start/run a business. As a result it has been difficult to maintain the utilization of loan. MFIs now need to focus in providing/linking skill training to their clients. Due to inadequate skills, loan offered by MFIs are either spent in unproductive activities or the use of loan has not generate optimum revenue which a skilled entrepreneur could earn. This has alerted MFIs to provide or link with skill training with the loan availed by their clients.
Nerude is committed to connecting the rural poor, disadvantaged groups (DAGs), and women to formal financial products and services in order to enable them with choices to save, borrow, invest, and earn. While enhancing access to finance for people living in remote and inaccessible regions is an urgent need, efficiency and sustainability of doing so are critical. Nerude believes a paradigm shift is needed in the microfinance (MFI) sector with the adoption of new technology, helping it achieve organizational efficiency and expand its outreach in a more self-sustainable manner.
Project Objectives:
- Provide EDS Services to enhance the capacity and productivity of members in 7 districts namely Jhapa, Illam, Sunsari, Sarlahi, Rupandehi, Kapilvastu and Arghakhanchi (through 16 branches).
- Enhance skills and augment knowledge on financial literacy via awareness campaigns and Buzz Nerude.
- Enhancement in skills of our staffs through digitalization of banking and deliver mobile financial services to geographically difficult locations.
Project Activities:
- Enterprise Development Services (EDS): EDS will help to boost income generating and financing activities among its members. It will enable members to become more productive and thus create local employment. These EDS officers, in co-ordination with external trainers, will be responsible to impart core skills related to agriculture & non-agriculture activities. For instance: sound knowledge of choosing optimum variety, micro-spacing, composting, etc. will bring a huge change in the status quo of farming in that area.
Unlike a regular loan, where members just get the loan amount and no business/ marketing support, Nerude plans to couple EDS Sakchyam loan with adequate training in agriculture, livestock, market expansion and entrepreneurship development. The loan size will be from NRs 70,000 to 300,000. However those seeking higher amount could opt for collateral loan. The participants for training will be Nerude’s existing members or potential members who are planning to establish small/ medium to large enterprise business locally. For example: mushroom farming, poultry farm etc. The cost of the training will be partly paid by the members (NRs 500 per training). - Tablet Banking
Nerude also plans to equip their loan officers with tablets to automate their manual transaction. It will help increase efficiency of clients while reducing the possible human errors while conducting centre meetings. This will help eliminate passbooks and collection sheets. Nerude believes the efficiency of its staffs will increase by 30% once staffs start using these tablets. It will also help Nerude in delivering financial literacy during center meetings. Moreover, Nerude also plans to introduce mobile banking system to notify its clients on the financial transactions. - Financial literacy & Buzz Nerude
Nerude plans to conduct financial literacy programs/ classes through various means. Financial literacy at center meetings, market centers, street dramas etc are some of the ways which we will be using to impart financial literacy among members/ non-members.
In addition to regular financial literacy class, Nerude has introduced Buzz Nerude – a mobile platform set in a vehicle to disseminate messages in different places. The Buzz is a novel concept in Nepal which aims to provide financial literacy (FL) programs through movable dedicated vehicle in places where regular financial literacy classes are not taking place or is difficult to cater to on a regular basis. The Buzz is a mobile financial literacy school, which moves from place-to-place and imparts financial and entrepreneurial education to the MFI members and prospective clients. The Buzz will be equipped with training materials (board, marker, duster, chair, desk, tent, projector, laptop etc.) and the vehicle will serve as a classroom anywhere, anytime. In some cases, it can also be used to conduct mass FL campaigns such as Street Drama, Video Screenings and disseminate various kinds of FL publications.Through this innovative concept, Nerude will be able to reach out to a wider group of audience. This type of initiative is new in Nepal but has been in practice in India and Africa. Nerude plans to educate their clients (especially through videos) and perform Street Drama using the Buzz so that they can educate their clients regularly even in remote locations. This initiative will help them expand their outreach, increase goodwill of the institution and help reach its financial literacy goals. Nerude expects to increase the number of its loan portfolio and get a better creditability through this service.
Project Derivable:
- Nerude aims to reach 3,442 clients with EDS Sakchyam Loan over a 3-year project period.
- During the project period, Nerude will also establish a new branch in Arghakhanchi with the support of Sakchyam.
- Nerdue plans to reach more than 29,200 beneficiaries via new and revised financial literacy program
- Nerude will also provide entrepreneurship/skill development training to more than 3400 beneficiaries.